Is New Hampshire Facing Another Education Funding Crisis?

Published on July 7, 2018

In 1991, five communities—Claremont, Franklin, Lisbon, Pittsfield and Allenstown—sued the state, arguing that the education funding system was unconstitutional. The plaintiffs won the first round in 1993, when the Supreme Court ruled that education is a fundamental right under New Hampshire’s constitution.

The plaintiffs won the second round in 1997, when the Court ruled that the way New Hampshire paid for public education was unconstitutional because it resulted in school tax rates that were four times higher in some towns than in others.

In essence, the Supreme Court ruled that for purposes of providing an adequate education, New Hampshire is one community. We should care as much about the children in Franklin or Allenstown as we do the children in our own city or town. Any tax used to pay for an adequate education must have the same rate across the state.

Two decades later, the problem is worse than it was in the 1990s. The total property tax bill in New Hampshire has more than doubled since 1999, putting added pressure on property taxpayers, towns, and schools districts.

Property-poor cities and towns are actively considering a new education funding lawsuit. An attorney who was part of the Claremont case legal team is leading the charge.

At Pittsfield High School, all foreign language teachers have been laid off. How will Pittsfield students meet the foreign language requirement of college admission?

At Franklin High School, students are forced into study halls when there are no classes available for them to take during a particular time slot.

The problem with our education funding system is obvious. The average per student cost in New Hampshire is over $15,000. The state’s share of the expense is about $3600. The state’s position that we can adequately educate all of our children for $3600 each does not pass the ‘straight face’ test.

New Hampshire’s constitution reminds us that education is “essential to the preservation of a free government.” Education is also essential to our economic future.

We don’t need another lawsuit to do the right thing. The State simply needs to provide adequate funding to all of our public schools, and to pay for it in a way that does not tax people out of their homes.

The first step in solving a problem is to admit there’s a problem. The second step is being aware of all options. What we need is a non-partisan commission to study the pros and cons of our property tax system and alternative ways to pay for schools, with enough funding to hire experts to analyze the economic impact of viable options.

We had such a study underway in 2000. The preliminary report was released on August 24, 2001. It included some startling conclusions.

At that time, households with incomes over $100,000 represented 12% of total households, but had 50% of all income. The other 88% of households, with incomes below $100,000, had the other half of statewide income, but paid far more than half of all state and local taxes in New Hampshire.

Republicans in the legislature were terrified of the report’s conclusions, so they buried the preliminary report and fired the company that did the work. They did not want the people to see that the New Hampshire “tax pledge” perpetuates a tax system that is grossly unfair, harms many schools and communities, and causes economic damage.

There are ominous trends in New Hampshire. Property taxes rise faster than inflation and faster than incomes year after year. Adjusted for inflation, state general fund revenue has declined since 2005, even as the state’s population has grown. State funding for the University System has declined 35% since 1988, after adjusting for inflation and population growth. Our mental health system is so underfunded that people in mental health crises pile up at emergency rooms because there are no beds available. The opioid crisis rages, and treatment centers are in danger of closing for lack of funding.

We can change course, but only if we stop voting for people who keep “pledging” to do the same thing.

If you like the property tax; if you think it is a fair tax; if you don’t mind that it has more than doubled since 1999; if you don’t care what our tax system is doing to students in property-poor towns; if you are OK with taxing retirees out of their homes; if you think we should get more than two-thirds of all state and local tax revenue from property taxpayers; then keep on voting for people who take “the pledge,” which is nothing more than a pledge to keep raising your property taxes.